Chevron defends itself in Ecuador environmental settlement

LAGO AGRIO, Ecuador — Donald Moncayo walks to the edge of a flat grassy field that once held two large pits that brimmed with a stew of water and crude from an oil-drilling operation. He lifts a heavy auger above his head and prepares to plunge it into the ground.

“They always show you the shirt the coat and the tie,” he said of the area, called Sacha 53, which is now pastureland and spindly trees. “They never show you the tumor underneath the shirt.”

For almost a decade, celebrities, journalists and shareholders have tromped through Ecuador’s jungles on competing excursions that have become a routine part of what could be the world’s most expensive environmental case.

The “Toxic Tour” — led by Moncayo — is held on behalf of some 30,000 Ecuadorian villagers who claim Chevron’s predecessor poisoned their environment with shoddy environmental practices that included pumping millions of gallons of oil-tainted wastewater into creeks and streams.

The other tour is led by Chevron. The oil giant shows idyllic agrarian landscapes — like Sacha 53 — where Texpet, a subsidiary of Texaco, helped pump crude from the 1960s to 1992 when it was a minority partner of the state-run oil company.

When Texaco left Ecuador, it spent $40 million to clean up its share of the operations, and the government absolved it of any further legal responsibilities in 1998.

But Ecuador’s courts found that the government deal did not cover third-party claims. So when Chevron and Texaco merged in 2001, Chevron inherited the legal battle.

The company contends it’s the victim of a global shakedown engineered by greedy lawyers, environmental groups and unscrupulous government officials.

The case — in one form or another — has dragged on for 18 years, has generated more than 200,000 pages of evidence, and chewed through six Ecuadorian judges. In February, the court awarded the plaintiffs $9.5 billion — the largest environmental verdict in history — but far less than the $27 billion they were seeking.

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